You can't ask for a better location than The Canmore Hotel Hostel (or Canmore Party Hostel depending on which site you're booking it through). It's a decent hostel, seems to have a lot of permanent residents though, but that came in handy when the room code didn't work as one of them was able to summon a staff member by text who arrived less than a minute later informed me my room had been changed and there were new codes. So after you book this place you are sent a front door code and room and bed (with door code). There are no staff in the hostel. I guess they turn up to clean it after checkout time. Bathroom was pretty messy as was the kitchen. There's plenty of options to eat close by (expensive) and cheaper ones once you walk a few blocks away. Lots of supermarkets to choose from, I got a roast chicken in one. The street out of town where Flix Bus drops you off is lined with American/Canadian fast food franchises (Flix drops you off at Tim Hortons/Wendys) which is about a twenty minute walk away from the hostel. Easy walk though, no hills.
I thought the bar downstairs would be annoying noise wise but it was actually quite pleasant to hear the karaoke, I sat in the entrance room at the bottom of the stairs on the computer and enjoyed it. The only noise that is an issue is the door code pad, every time someone enters the correct number it does a celebratory tune, which is very annoying in the early morning with people getting up to use the bathroom or whatever.